High debt driving farms into receivership

Dairy farmers are among the agricultural sectors struggling most with their debts.

ABC: ABC

There has been a large jump in the number of farms going into administration because of high debts, and administrators say the problem is getting worse.

Scores of farms across the country are in receivership, or in some form of financial distress, because farmers borrowed against land that is now falling in value.

The problem is particularly bad for dairy farmers, which have also been hit with low milk prices.

In Queensland alone, farm debt jumped 19 per cent over the two years to 2011 to around $17 billion.

Chris Honey from corporate advisory and insolvency firm McGrathNicol says more farmers are losing their properties.

"In sectors such as the northern beef sector, the dairy sector in New South Wales and northern Victoria, we are just beginning to see signs of distress in the cropping areas of central New South Wales," he said.

The Federal Government is now offering low interest loans to farmers, but farming bodies are dubious about how much they will help.